US jury indicts Russian national for laundering $4-bn in bitcoin

27 July 2017

A Russian national was indicted by a US jury yesterday, for operating a digital currency exchange to launder over $4 billion for people involved in crimes ranging from computer hacking to drug trafficking.

According to local authorities, Alexander Vinnik was arrested at a small beachside village in northern Greece on Tuesday, following an investigation led by the US justice department along with a number of other federal agencies and task forces.

According to US officials, Vinnik and his firm "received" over $4 billion in bitcoin and did substantial business in the US without following appropriate protocols to protect against money laundering and other crimes.

He was also linked to the failure of Mt Gox, a Japan-based bitcoin exchange that collapsed in 2014 after it was hacked. In a statement, they added, Vinnik "obtained" funds from the hack of Mt Gox and laundered them through BTC-e and Tradehill, another San Francisco-based exchange owned by him.

"Just as new computer technologies continue to change the way we engage each other and experience the world, so too will criminals subvert these new technologies  to serve their own nefarious purposes," said Brian Stretch, US attorney for the Northern District of California, where Vinnick was indicted in the statement, Reuters reported.

Mt Gox was once the largest Bitcoin exchange of its kind.

At a Bitcoin exchange real money can be exchanged for digital currency. Unlike traditional currencies such as the US dollar, Bitcoin does not have a centralised bank and is not backed by any government.

The exchange declared bankruptcy in 2014 after a hack left it 850,000 Bitcoins, worth millions at the time.

According to local media reports, Greece will soon start negotiating with the US about Vinnik's extradition.

A conviction could mean 20 years in prison, on charges of money laundering.

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